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Materials Lect

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Hugh Navarro
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25 views3 pages

Materials Lect

Uploaded by

Hugh Navarro
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Inventory Items Source Documents to support material

Inventory is often a firm's largest investment transactions


Merchandise for resale • Purchase Requisition Form
Manufacturing raw materials (work not • Purchase Order
started), work-in-process (work started by not
• Receiving Report
yet completed) and finished goods (work
completed) • Material Requisition Form
Firms today should minimize inventory while • Bill of Materials
meeting customer demands
• Return Materials Report
Managing inventory-The goal is to minimize
the company's monetary commitment to • Debit or Credit Memorandum
inventory without negatively impacting product Functions of Purchasing Department
availability
■ Receives purchase requisitions for materials,
supplies and equipment.
Steps in the Procurement & Use of Materials ■ Keeps informed concerning sources of supply,
■ For each product or product variation, prices and shipping and delivery schedules
engineering determines the routing for each ■ Prepares and places purchase orders; and
product, which is the sequence of operations to
be performed, and establishes the bill of ■ Arranges for reporting among purchasing,
materials, which is the list of materials receiving, and accounting departments.
requirements for each step in the sequence.
Purchasing Forms
■ The production budget provides the master
plan from which details concerning materials
requirements are developed.
■ The purchase requisition informs the
purchasing agent of the quantity and kind of
materials needed.
■ The purchase order contracts for quantities to
be delivered.
■ The receiving report certifies quantities
received and may report results of inspection Purchase requisition
and quality testing.
a written request usually sent to inform the
■ The materials requisition authorizes the purchasing department of a need for materials or
storeroom or warehouse to deliver specified supplies includes the requisition (serially
types and quantities of materials to a give n numbered), name of the department or
department at a specified time. individual making the request, quantity items
■ The materials record cards record each requested, description of the item, unit price,
receipts and issuance of each kind of material order data, required delivery date, and
and serve as perpetual inventory records. authorized signature.
Purchase order
Receiving Report
- a written request to a supplier for specified
goods at an agreed price. The request also upon delivery, the goods are checked to be sure
stipulates the terms of delivery terms of payment that they are not damaged and the they meet the
and terms of payment specification of the purchase order. This is
recorded in the receiving report which includes
Electronic Data Interchange
the supplier's name, purchased order number,
- electronic interchange of business information date delivery was received, quantity received,
using a standardized format; a process which description of goods, discrepancies from the
allows one company to send information to purchase order and authorized signature.
another company electronically rather than with
Invoice Approval & Data Processing
paper.
■ By the time materials reach the receiving
Functions of Receiving Department
department, the company usually will have
■ Unloads and unpacks incoming materials received an invoice from the vendor.

■ Compares quantities received with the ■ The invoice and a copy of the purchase order
shipper's packing list are filed in the accounting department.

■ Matches materials received with descriptions ■ If the invoice is correct, the invoice clerk
on purchase orders, approves it and attaches it to the purchase order
and receiving report for preparation of the
■ Prepares receiving reports voucher.
■ Notifies the purchasing department of ■ Voucher data are analyzed and recorded
discovered discrepancies
■ The original voucher and two copies are sent
■ Arranges for inspection when necessary to the treasurer for issuance of a check.
■ Notifies the traffic department and the ■ The treasurer mails the check and original
purchasing department of any damage in transit voucher to the vendor, files one copy of the
■ Routes accepted materials to the appropriate voucher, and returns the other copy to the
location. accounting department for the vendor's file.

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